Cognitive Euroscience in Croatia: Price estimations in the new and old currency in the face of inflation

Abstract

Do customers convert values to a familiar currency (rescaling hypothesis) or do they learn item-price pairs (relearning hypothesis) when they estimate the prices of consumer goods and services in a currency they are unfamiliar with? We addressed this question by replicating the study conducted in Portugal and Austria in 2001 and 2002, around the time when these countries switched to the euro (Marques & Dehaene, Journal of Experimental Psychology: Applied, 2004, 10, 148–155). The study was made in Croatia where university students (N = 181) were asked to estimate the typical price of a set of 60 items from November 2022 to June 2023, around the time at which changeover to the euro took place. The results support the rescaling hypothesis by showing concurrent improvements in the precision of price estimates for frequently and rarely bought items. The reliance on rescaling is probably caused by a high inflation that accompanied a changeover to the euro in Croatia.